Amazon is one of the most known brands in the world and the fourth tech company to reach the $1 trillion market capital value. As one of the largest companies in the world, you may wonder how it does its procurement.
In this article, we will discuss what Amazon is and how it does its procurement effectively which led it to become what it is today. We will also show you Amazon’s revenues and expenses so you may grasp how large Amazon is.
Once you are finished reading this article, you will know how Amazon procures, earns, and spends. Additionally, you can gain some insights into how Amazon procures which you can implement in your company to help it develop.
What is Amazon?
Amazon was founded by Jeff Bezos on July 5, 1994. It is the largest online retailer in the world and a well-known cloud service provider. Originally, Amazon started as an online bookselling business on July 16, 1995.
Jeff Bezos first incorporated the company as Cadabra but changed it later on to Amazon. He selected the name Amazon as it was exotic and a reference to his plan for the company’s size to reflect the Amazon river which is one of the largest rivers in the world. Since then, the company’s motto has always been “get big fast”.
In 2005, Amazon announced Amazon Prime as a membership service offering free two-day shipping within the United States for all eligible purchases for an annual fee. This was the beginning of one of the largest subscription programs in the world. Up until now, Amazon continues to add more benefits to its Prime offering to attract new customers to subscribe.
Additionally, Amazon launched Amazon Web Services (AWS) in 2006 which offers cloud computing services not just to itself but also to other companies. AWS allows companies to purchase storage space to host a website or to run a huge database.
AWS was launched for Amazon to stay at the forefront of the retail industry. By creating great technology for itself, it was able to launch all of its quick selling and delivery services for various businesses and realized its technology was a business offering on its own.
As Amazon continues to diversify, it has revolutionized numerous industries to change the way customers consume entertainment, buy clothing, get their groceries, and buy and read books. Furthermore, with all the companies it has acquired recently, it is obvious that it will not stop until it has dominated all aspects of retail.
Amazon is also expanding into more and more regions across the world. With all the milestones that Amazon achieved, there is no doubt that it had already embodied its tagline which is “the everything store”.
The Amazonificationof Procurement
One of the reasons why Amazon is at the top of its game is due to the multi-leveled e-commerce strategy it employs. This strategy allows almost anyone to sell almost anything using Amazon.
The level of customer tracking at Amazon is on another level too. Using the data it gathers on every registered user during every visit to its website, it points users to products they may be glad to discover and buy.
The HFS Triple-A Trifecta is a framework that helps you grasp the different clusters of technologies central to the amazonification of procurement. To automate most processes, the use of smart analytics is utilized to identify patterns and support decision-making.
Smart analytics is infused with AI to learn about the customer’s behavior and create an intelligent interface and support customers with recommendations and actions.
As Amazon digitized its procurement, it is building a system that will automatically evaluate responses, solicit bids, and generate contracts. Additionally, data input and classification will become more advanced when the system executes transactions independently.
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